Arizona State Highway Comm'n v. Nelson

In Arizona State Highway Comm'n v. Nelson, 105 Ariz. 76, 459 P.2d 509 (1969), the court addressed whether the Arizona Highway Commission violated the state-debt restriction by issuing bonds to finance the acquisition of property intended for future highway needs. Because the bonds were secured by a lien on monies paid into the State Highway Fund from motor vehicle license fees and a share of the Motor Vehicle Fuel Tax, respondents maintained that the bonds were general obligations of the state that exceeded the debt restriction. Id. at 78, 459 P.2d at 511. They also criticized the special fund method of deficit financing as violating Arizona's public policy of avoiding substantial debt. Id. at 79, 459 P.2d at 513. The court rejected respondents' arguments, citing Switzer as "solid authority." Id. The court additionally emphasized that because the voters amended the constitution in 1952 to earmark certain motor vehicle taxes and fees for highway and street purposes, Ariz. Const. art. 9, 14, these monies were not available for general state appropriations and their pledge did not therefore create "state debt." Id. at 79- 80, 459 P.2d at 512-13.